Bitcoin Soars to $87K—But Could a Crash Be Coming Next?

Bitcoin crossed the $87,000 mark on Sunday, trading at approximately $87,325 by market close—a level not seen since April 2. The flagship cryptocurrency posted a 2.4% daily gain, reigniting bullish sentiment among investors. While the latest rally points to growing confidence in the digital asset space, financial experts urge traders and long-term holders alike to stay grounded as macroeconomic headwinds persist.

One of the key drivers behind Bitcoin’s recent price movement is a notable increase in institutional activity. Strategy, formerly MicroStrategy, added 3,459 BTC to its balance sheet despite reporting $5.91 billion in unrealized losses from earlier purchases. This bold move signals not only confidence in Bitcoin's long-term value proposition but also a strategic bet on digital assets as a hedge amid global financial uncertainty. The company’s continued Bitcoin acquisition strategy has positioned it as a bellwether for corporate crypto adoption.

Liquidity trends are also playing a pivotal role. Dominick John, an analyst at Kronos Research, pointed to a significant expansion in global M2 money supply, which reached $90.2 trillion across the U.S., Europe, Japan, and China from December to February. This surge in money supply typically benefits risk assets like Bitcoin, especially when real yields are suppressed or inflationary concerns rise.

Adding to the momentum, U.S.-based spot Bitcoin exchange-traded funds (ETFs) recorded a net inflow of $15.8 million last week. The increase in ETF flows reflects renewed institutional appetite for regulated Bitcoin exposure, which analysts say could be a sign of deepening market maturity. These inflows not only provide buying pressure but also bring further legitimacy to Bitcoin as an asset class in traditional financial circles.

However, seasoned analysts are advising caution. Peter Chung, head of research at Presto Research, noted that although Bitcoin’s performance is impressive, the broader market still faces uncertainty tied to U.S. fiscal policy, trade negotiations, and monetary tightening. With U.S. tariff talks ongoing and inflationary signals mixed, the Federal Reserve’s response remains a critical variable for digital asset markets.

All eyes are now on the Federal Open Market Committee (FOMC) meeting scheduled for May 6–7. According to the CME FedWatch Tool, traders are currently pricing in a 12.4% chance of a 25-basis-point rate cut. A lower rate environment would likely bolster Bitcoin and other cryptocurrencies by encouraging capital inflows and risk-taking. But without a firm signal from the Fed, analysts believe the rally could stall or retrace in the short term.

In the broader crypto landscape, market performance was mixed. Ether inched up 0.97% to $1,632, while XRP rose 1.38% to $2.11. Solana, however, slipped 0.87% to $140.20, underlining the uneven nature of current market sentiment. While some altcoins are gaining traction, others are lagging behind as investors remain selective in an uncertain environment.

Bitcoin’s climb above $87,000 is undoubtedly a milestone, but experts emphasize the need for a level-headed approach. Long-term bullish signals are emerging, especially from institutional players, but market participants should remain aware of the delicate balance between momentum and macroeconomic realities. Whether this rally holds—or gives way to consolidation—will likely hinge on upcoming policy decisions and continued capital flow into the digital asset ecosystem.

Also Read: Top 3 Cryptos to Buy Now in 2025 While Prices Stay Low